A broker can take which of the following for a deposit with seller's approval?

A broker can take which of the following for a deposit with seller's approval?

• A. A balloon payment
• B. An earnest money
• C. An acceleration payment
• D. A service fee

Answer: (C)

In a real estate deal, the funds a buyer puts down with an offer are called earnest money. This money shows the buyer’s seriousness and is typically deposited into an escrow or trust account, where it’s held by the broker or a licensed escrow agent until closing. When the seller approves the deposit, it confirms that these funds are part of the deal and will usually be credited toward the purchase price at closing (or returned if the contract falls through under the agreed contingencies). Earnest money isn’t a loan payment or a fee; it’s security that the buyer intends to follow through with the purchase. Balloon payments and acceleration payments relate to financing terms on a loan, not to a buyer’s deposit in a real estate transaction. A service fee is a separate charge and not the money put down to secure the contract. Earnest money thus best fits the idea of a deposit with seller’s approval, serving as the buyer’s good-faith pledge within the agreement.

In a real estate deal, the funds a buyer puts down with an offer are called earnest money. This money shows the buyer’s seriousness and is typically deposited into an escrow or trust account, where it’s held by the broker or a licensed escrow agent until closing. When the seller approves the deposit, it confirms that these funds are part of the deal and will usually be credited toward the purchase price at closing (or returned if the contract falls through under the agreed contingencies). Earnest money isn’t a loan payment or a fee; it’s security that the buyer intends to follow through with the purchase.

Balloon payments and acceleration payments relate to financing terms on a loan, not to a buyer’s deposit in a real estate transaction. A service fee is a separate charge and not the money put down to secure the contract. Earnest money thus best fits the idea of a deposit with seller’s approval, serving as the buyer’s good-faith pledge within the agreement.